Fox News Sunday

January 27, 2002

SNOW: Enron, who knew? Bin Laden, dead or alive? Yasser Arafat,
friend or foe? Tax cuts, yes or no? And what does the president
do with 80 percent approval ratings? We'll toss those questions
to our special guest, Vice President Dick CHENEY.

Plus, Brit HUME, Mara Liasson, Bill Kristol and Juan Williams
offer their wit and wisdom. This is the January 27 edition of
Fox News Sunday.

Good morning, and welcome to Fox News Sunday. Our special guest
today, the vice president of the United States, Dick CHENEY..

Mr. Vice President, good morning.

CHENEY: Good morning, Tony.

SNOW: There's been a bombing this morning in Jerusalem. Just the

other day President Bush said of Yasser Arafat, N V I am
disappointed in Yasser Arafat. He must make a full effort to
rout out terror in the Middle East.''

How did today's events affect that?

CHENEY: It's just one more example of the extraordinarily

difficult circumstances that exist there.

Clearly, when Yasser Arafat returned to Palestine, as the peace

process-began several years ago, he renounced violence,
terrorism, and promised to enter into a peace process to try to
trade land for peace and resolve the outstanding conflict.

In recent months, obviously, the level of violence has

increased, and a lot of that due to suicide bombers that launch
from Palestine against Israeli civilians.

This attack this morning is just one more instance that proves
that there is no effective control of the terrorist attacks that
are being launched against Israel.

SNOW: When you say there's no effective control, do you believe

Arafat is trying to control it?

000342
 One of the most disturbing events recently has been the
discovery of this Karine A ship, a ship trying to move 50 tons
of military equipment--weapons, C-4 explosives, new extended-
range rockets--to Palestine.

SNOW: From Iran to Palestine.

CHENEY: Provided by Iran and apparently through Hezbollah to

Palestine.

And the thing that's especially disturbing about this, not only
would it escalate violence obviously--the only use for the C-4
is to make the suicide bombers more effective or kill more
people when they detonate--but it also, in effect, has the
Palestinian Authority and Yasser Arafat, the key people around
him, working now with Iran, which is absolutely dedicated, has
stated repeatedly that a major objective of their foreign policy
is to destroy the peace process—and with Hezbollah, which is
also clearly one of the world's foremost terrorist organizations
devoted to ending the peace process.

So it raises serious questions whether Mr. Arafat is in fact

really interested in moving forward with the peace process.

^ SNOW: Raises serious questions. Do you think there's any

question that he was not involved in...

CHENEY: In my mind, and based on the intelligence we've seen,

the people that were involved were so close to him it's hard to
believe that he wasn't. _

SNOW: He wrote a letter to the president saying he knew nothing

about it. How would you characterize that statement?

CHENEY: Well, it doesn't help. It's not credible for him to

suggest that.

The president has done everything he can, spent a lot of time

and effort to try to promote the cause of peace. He's called for
a Palestinian homeland, first president to ever do that. Colin
Powell made a very important speech in Louisville a few weeks
ago on the whole Middle East situation. We sent General Zinni to
the area to try to get negotiations re-started again.

But as long as we see this inability, if you will, whether it's

deliberate or whether it's through lack of authority, to control .

000343
the suicide bombers and to end terrorism attacks, it's very hard
to see how we move forward on the peace process.

SNOW: Who must take the first step?

CHENEY: Well, I think Arafat has to demonstrate that he really

is serious about it. It's up to him.

SNOW: And how would he demonstrate that?

CHENEY: Well, he would move aggressively to rout out the

infrastructure of the terrorist organizations in Palestine. He
would arrest those who are known to be perpetrating those acts
and planning them and providing and supporting them. He would do
everything he could, make a 100 percent good-faith effort to put
an end to terrorism. So far he hasn't done that.

SNOW: You mentioned the Karine A. This is a freighter headed

from Iran to help out Palestinians. How would you characterize
that mission? Was that a terrorist mission?

CHENEY: Oh, I think so, given the people that were involved.

SNOW: So Yasser Arafat was involved, in your opinion, in a

terrorist mission?

CHENEY: That's correct.

SNOW: What would that make him?

CHENEY: Well, he clearly was a terrorist, in the past and was so

identified by the United States government.

Now, in the early '90s, all of that changed. We had the Oslo
Accords. We had Arafat come to Washington and enter into an
agreement, 1993, on the South Lawn of the White House, and we
set up the process, got the process going of negotiations. And
he renounced terrorism and he renounced violence and recognized
the right of Israel to exist.

CHENEY: What's happened now is, after the Camp David accords
blew up in 2000 at the end of the Clinton administration, and
the intifada began, so now we've had this escalation of violence
on both sides, to the point now where it's very hard to see how
we get people back together at the negotiating table until we
end the violence. And at the heart of that are those suicide
attacks being launched against Israeli civilians.

000344
 SNOW: So the American position is: No talks until Yasser Arafat
acts effectively to put an end to terrorism?

CHENEY: We think he has to make a 100 percent effort, do

everything he can to control—exercise control, if you will,
over those areas of Palestine that he's responsible for. The
Palestinian Authority has security forces and so forth for that
purpose. And he simply has to step up to those responsibilities,
or it's impossible to see how we actually resume the peace
process.

SNOW: His security forces are at least 10 times as large as

Hamas and Hezbollah within his territory. So don't you believe
that he ought to be able to tamp down on them?

CHENEY: I do. I think the only way you're going to move forward
on this is if in fact we can get the level of violence
significantly reduced, and he's the lead player obviously on the
Palestinian side.

SNOW: A lot of people who have worked with him are now very
bitter. And Anthony Zinni is quoted in today's v^Jerusalem
Post1' as calling the Palestinian Authority a mafia, with Yasser
Arafat as its boss.

CHENEY: I haven't seen the quote.

SNOW: OK, so...

CHENEY: Tony's a pretty tough guy. But I haven't seen the quote.

SNOW: Well, this is the man that we are going to dispatch to the
region. As a matter of fact, Yasser Arafat has called for
sending him back. Are we going to send Anthony Zinni back to the
Middle East?

CHENEY: At this stage, we need to see some positive signs that

his return would do some good.
And that means we've got to see some positive results out of
Arafat. He has to fulfill his commitments. He's got to exercise
his responsibility to control the terrorist attacks.

SNOW: Are you afraid right now that Iran is now in cahoots with
the Palestinian Authority?

j 000345
CHENEY: I am. Clearly, there's going to be some kind of debate
as to whether or not he simply went to them because he thought
he could get arms there. But, given their...

SNOW: But he went to them, though. They did not come to him?

CHENEY: I can't say that for sure, but I know where he acquired
the weapons. He did acquire the weapons from Iran.

And the really disturbing part of this, of course, is that there

are a lot of places he could go in the Arab world if he were
looking for support and sustenance or for help in moving the
peace process forward. Clearly, he hasn't done that. What he's
done is gone to a terrorist organization, Hezbollah, and a state
that supports and promotes terrorism, that's dedicated to ending
the peace process, Iran, and done business with them.

SNOW: You mentioned earlier that there have been a couple of

statements by this administration supporting the cause of
Palestinian statehood. You also said in December that the recent
violence had hurt that cause. Is that off the table for now?

CHENEY: The Palestinian homeland?

No, what the president said in effect is, this clearly is part
of the ultimate vision for that part of the world, that you'll
have a peace process, the Israelis and the Palestinians will
negotiate on all of these important issues—where boundaries
are, what the terms and conditions and so forth are.

But, at the end of that process, the Palestinian people, who

after all probably suffer more than anybody else in that
process, and the lack of an effective peace process, the
Palestinian people would have their own homeland, where they
would exercise sovereignty and live in peace.

And that's a dream, I think, for many of the Arab leaders in

that part of the world, certainly for this administration and, I
think, for many Palestinians. Apparently, however, Mr. Arafat
doesn't look as though he shares that.

SNOW: That being the case, when you were defense secretary in
the first Bush administration, that administration ceased its
relations with the Palestinian Authority. Is that a possibility?

000346
CHENEY: Well, we did on that occasion, again in particular
because we felt he hadn't kept his commitment to renounce
violence.

At this stage, I wouldn't want to forecast...

(CROSSTALK)

SNOW: But that is a possibility?

CHENEY: What we've done is make it abundantly clear that Arafat

has to take action. He has to...

(CROSSTALK)

SNOW: Do you have a deadline? I mean, many people have issued

ultimatums to him before.

CHENEY: I don't want to predict...

SNOW: I'm not going to ask you what the deadline is. Have you
given him one?

CHENEY: We've been very clear in our communications with Mr.

Arafat. Colin Powell talked with him just in the last couple of
days, what it is we expect of him. He knows what he has to do to
be taken seriously.

SNOW: Let's switch to Enron. Much in the news. A lot of

Democrats and Republicans on Capitol Hill want you to release
the names of companies and individuals who participated in the
deliberations of your~energy task force.-Why don't you release
the names?

CHENEY: Well, there's an important issue here. Tony, you've got

a situation in which the president asked me to put together a
comprehensive energy policy, the first week we were in office,
because there was none. It was vital for our economic and our
national security we do that.

So we produced a report. It's a good report. We worked for

several months on it. It's got 105 recommendations in it. And we
published thousands of copies of it, distributed it all over.
The House has now passed its portion of it.

CHENEY: The problem we've had is that Henry Waxman doesn't want
to have to deal with the substance of the report, but he's tried

000347
to attack the report by challenging the process, by saying we
didn't meet with the right people. He's gotten the GAO involved
now and demanding...

SNOW: Government Accounting Office.

CHENEY: Government Accounting Office--and demanding that we

produce information about how the report was put together.

Now, we've given him an awful lot. We've given him all the
financial records, the work that was done by the agency, all of
that's gone to the GAO.

What we've not given them, and where the dispute lies, is
they've demanded of me that I give Henry Waxman a listing of-
everybody I meet with, of everything that was discussed, any
advice that was received, notes and minutes of those meetings.

Now, that would be unprecedented in the sense that that's not

been done before. It's unprecedented in the sense that it would
make it virtually impossible for me to have confidential
conversations with anybody.

It, in effect, says that I, and future vice presidents, would be

in a position where any time Henry Waxman or any other member of
Congress wants to demand of me information about the meetings I
hold, I'd have to give it to them. The lawyers in the executive
branch are convinced this is a fundamentally bad idea.

SNOW: So you'll go to court over this?

CHENEY: As of last August, we've made that decision to go to

court. We'd come to an ultimate showdown, and we've concluded
that, in fact, we were prepared to go to court if that's what
was necessary. At that point, the GAO backed off, and they, in
effect, sort of put everything in abeyance.

Now what's happened is we've come back around, as a result of

the Enron corporate collapse, some of the Democrats on the Hill
are trying to re-energize this and try to turn it into some kind
of political debate with respect to Enron.

But what's really at stake here is the ability of the president

and the vice president to solicit advice from anybody they want
in confidence, get good, solid, unvarnished advice without
having to make it available to a member of Congress. The GAO

000348
does not have the authority to get into that particular arena.
It has a...

SNOW: Is there any circumstance—you talked before about

compromises, that there may be...

CHENEY: Well, I think we have compromised. We've given them a

great deal of information. We have not given them those things
that we believe that I have to have--I have to have the ability
to talk to people in confidence if I'm going to effectively
advise the president.
SNOW: So you will not give them anything more?

CHENEY: That's correct.

SNOW: No more compromises?

CHENEY: That's correct.

SNOW: David Walker, the comptroller general, said just

yesterday: " v We've never had any situation where we were
absolutely stonewalled by a task force of this type. The law in
past precedence says that Congress has a right to this
information and can use the GAO to conduct a non-partisan
review.''

CHENEY: No, that's where the dispute lies, because the GAO is a
creature of the Congress, created by statute. Their jurisdiction
extends to agencies created by statute. That's not me. I'm, as
part of the office of the president and the vice president of
the United States, I'm a constitutional officer. And the
authority of the GAO does not extend in'that case to my office.

Now, I've been around town for 34 years, Tony. I've seen a
constant, steady erosion of the power and the ability of the
president to do his job. We've seen the War Powers Act and
Anheim (ph) Powerment (ph) Control Act.

And time after time after time, administrations have traded away
the authority of the president to do his job. We're not going to
do that in this administration.

The president's bound and determined to defend those principles

and to pass on this office, his and mine, to future generations
in better shape then we found it.

000349
 And for us to compromise on this basic fundamental principle
^~~\d in effect do that. It would further weaken the presidency,
P" ) and we don't want to do that.

SNOW: Mr. Vice President, we're going to take a break.

But stay with us. We'll have a lot more on Enron, the economy
and much more in just a couple of minutes.

SNOW: We're back with Vice President Dick CHENEY. Also here,
Brit HUME, Washington managing editor of Fox News.

Brit?

HUME: Two questions, Mr. Vice President, on this Enron and the
GAO. Are there any circumstances under which a release of this
information to the members of Congress, informally, to a
committee, not the GAO, would be possible?

CHENEY: Well, there's, you know, there's no secret about what we

did with respect to the task force. We talked to all kinds of
people. I talked to energy companies, I talked to labor members,
talked to environmentalists. Other members talked to a wide
.s-•'"•••- variety of people, and folks came in and discussed with us and
j^ I gave us advice and recommendations. Some of them went out and
made public what they did. That's fine. That's their business.

What I object to, and what the president's objected to, and what
we've told the GAO we won't do, is make it impossible for me or
future vice presidents to ever have a conversation in confidence
with anybody without having, ultimately, to tell a member of
Congress what we talked about and what was said.

You just cannot accept that proposition without putting a chill

over the ability of the president and vice president to receive
unvarnished advice.

HUME: Having taken that position, clearly you believe at law you
will be able to sustain it.
CHENEY: We do.

HUME: A political question, and that is, whatever your motives

and whatever the underlying reality, it is going to look as if,
in the midst of the collapse of Enron and the attendant scandal,
that the administration has something it doesn't want to tell,
something it wants to hide.

) 000350
 Are you and the president prepared to endure what you know are
going to be the political difficulties that that position will
lead to, in order to vindicate this principle?

CHENEY: The issue here isn't, with respect to Enron, isn't what
advice they may have offered the energy task force. The issue,
with respect to Enron, is the corporate collapse. It's what
happened when, for whatever reason, laws were broken, maybe the
laws were flawed, maybe the accounting system was flawed, we'll
find out, we don't know yet. But that's the political issue,
with respect to Enron, as how that's handled.

HUME: I didn't say it would be fair. I just said you would

receive it.

CHENEY: That's how it'll be managed. And what's happened there,

of course, is the president's insisted on a full and complete
investigation. We're going to make absolutely certain, if there
are guilty parties there, if laws were broken, there's full
prosecution under the law. We've got a pension reform 401(k)
task force already working to look for ways to improve that.
We'll do whatever's necessary legally and, from a statutory and
regulatory standpoint, to make sure that doesn't happen.

But if you go back to August, and the judgment in August was

that it was important to protect this principle of our ability
to seek advice on a confidential basis, and that that was
legally sound and historically and constitutionally important,
the collapse of Enron doesn't change that.

Why would you say, well, Enron collapsed, therefore, you ought
to give up a basic fundamental principle of the presidency? It
doesn't track.

HUME: It isn't logical, but there it is.

CHENEY: Well, but...

HUME: And I just wonder whether, if there are political costs--

and there may be--are you saying here that you and the president
are prepared to bear them?

CHENEY: I'm saying, again, reiterate once again, we feel very

strongly that this is an important proposition.

And after all of these years, I think back over history, can you

J imagine an FDR or Teddy Roosevelt, in the midst of a grave

000351
10
national crisis, dealing with the problems we're having to deal
with now, over here on the side as a matter of political
expediency, trading away a very important fundamental principle
of the presidency? That's not how you make a great presidents.
And I think from the standpoint of this basic proposition, we
are right—I think people know we're right—and we'll do
everything we can to sustain that position.

SNOW: You held up the energy plan before. Is there anything in

that energy plan that was done specifically for or at the behest
of Enron?
CHENEY: I can't say. I'm sure they supported many parts of it.

We talked to them about their role. They were the world's

leading energy trader. At the time that they were involved, they
were heavily engaged in this whole process of trading energy. It
was a whole new development with respect to the way the markets
worked, and they had good advice to offer in terms of how you
dealt with that situation.

SNOW: So you don't agree with...

CHENEY: I can't say a particular proposal came from them. They

advocated, for example, or opposed price controls on energy. But
guess what? I've been opposed to price controls since I worked
in Nixon's control program 30 years ago. So, my own views in 20
some years worth of experience are heavily involved there.

But I'm sure, you know, as I talked to a whole wide range of

people, we gathered up information and advice and we put in
there.

Ultimately, we should be judged based on what we put in the

report. That's what I recommended. That's what the task force
recommended to the president. And we benefited from talking with
a wide variety of people in putting that report together.

SNOW: Well, Tom White, the army secretary, used to run something
called Enron Energy Services. It is now being reported that was
one of the spinoffs in which Enron was concealing its losses
from investors. If that is the case, and if he knew about it,
would you expect him to step down?

CHENEY: Well, I don't have any detailed information about what

was going on inside Enron, obviously.

000352
11
 I know Tom White, and Tom White was a great soldier. He's a man
who worked as Colin Powell's exec on my watch in the Pentagon.
We are extraordinarily fortunate to get him to give up his
private life and return to public service as secretary of the
Army. And I'm got every confidence he handled himself in an
ethically appropriate manner.

HUME: Speaking of Colin Powell, we now know from newspaper

reports, the Washington Times in particular on Saturday, that
there is a discussion within the administration about the proper
way to treat the prisoners held in Guantanamo Bay.

Secretary Powell apparently has recommended that before they be

designated as POWs or not that their cases be dealt with by a
tribunal and that they at all times be declared by us to be
governed by, and our treatment of them governed by, the Geneva
Convention, as best we can understand it.

What about that?

CHENEY: The actual issue's different than that. We're all in

agreement--Colin, me, Don Rumsfeld--that these are not lawful
combatants, they're not prisoners of law.

There is a legal issue involved as to whether they should be

-^ treated within the confines of the Geneva Convention, which does
have a section that deals with unlawful combatants, or whether
they should be dealt with outside the Geneva Convention.

There's another school of thought that says the Geneva

Convention does not apply to terrorist attacks. It was set up to
deal with a war between sovereign states. It's got provisions
for dealing with civil war. But in a case where you have non-
state actors out to kill civilians, then there's a serious
question whether or not the Geneva Convention even applies.

The bottom line is that legal issue is being debated between the
lawyers. It'll go to the president. He'll make a decision.

The detainees are being treated humanely. But they are not
lawful combatants. These are the worst of a very bad lot. They
are very dangerous. They are devoted to killing millions of
Americans, innocent Americans, if they can, and they are
perfectly prepared to die in the effort.
And they need to be detained, treated very cautiously, so that
our people are not at risk. And they also probably have
"""••>. information that we need to prosecute the war on terrorism.

12 000353
 So, they're being treated appropriately in Guantanamo Bay, but
i there is this legal issue that's going to get resolved.

HUME: What is the down side of going along with Secretary

Powell's advice on this?

CHENEY: Well, the Justice Department had other advice. Counsel's

office of the White House had other advice. It's a dispute among
lawyers about statutes, international agreements, international
law, how we should treat what is now--you know, this is a new
area we've embarked upon. We've not before been in the business
of detaining large numbers of terrorists.
And we've got an ongoing war going here. And so their fate, how
we deal with them appropriately, how we maintain our commitment
to our values as a free and open society, how we extend to them
humane treatment but at the same time deal with them the way
they need to be dealt with...

SNOW: There's no part of the difference with the Geneva

Convention says all they have to do is give name, rank, serial
number, birth date and what we want is a lot more information
than that, so there are certain restrictions of the Geneva
~--x Convention.

-^ CHENEY: Sure, that's one issue.

SNOW: Let's switch to the war. It has been reported that

American authorities believe that Mullah Omar and Osama bin
Laden are somewhere in that Pakistan-Afghanistan border area. Is
that correct?

CHENEY: We think so. We don't know for certain, but obviously we

received reports. And my guess is, personal view based on what
I've seen, that they are both still in the region.

SNOW: So there are signs, even though we're not getting videos
and other things, that bin Laden's still alive?

CHENEY: I think he is. Again, we haven't seen him, obviously, in

the flesh recently, and he's been very quiet. He hasn't released
any videos or made any public pronouncements. But I think, if he
were dead, there'd be more indications of it than we've seen.

SNOW: More violence?

> 000354
J
13
 CHENEY: No, I think more—there' d be more noise in the system
about his demise and about the future of the organization, if,
in fact, he were no longer there.

HUME: It now appears that the votes may be present, likely are
present, to pass campaign finance reform out of the House of
Representatives. You know basically the shape of the two bills.
There are a lot of similarities between them. You know what's
likely to emerge, therefore.
The president has indicated in the past that he would sign such
a bill. How does he feel about it now? Is that pretty forgone,
the president will sign the campaign finance bill?

CHENEY: Go back and remember, when we got started on this debate

early last year, the president laid out a set of principles, and
those will be the standards by which he judges any legislation
that lands on his desk.

He said, if you're going to have a bill, it ought to ban soft

dollars from corporations and from unions, that it ought to
provide for maximum participation by those who want to
participate, it needs to provide for full and open disclosure.
We need to make sure there's opportunity in there for people to
s---^ avoid having to contribute involuntarily, where they pay dues
J and a part of that gets contributed to political campaigns even
though they don't want it contributed to campaigns.
So those basic standards I think will be used to evaluate any
bill that lands on his desk.

HUME: So it's not definite at all that those bills that are over
there now that we know so much about would meet the test.

CHENEY: Well, I think the president would like to sign a bill.

He thinks a campaign finance bill would be a good idea, a
finance reform bill, if it's a good bill, if it meets those
standards.

SNOW: Is McCain-Feingold such a bill?

CHENEY: I think we felt it needed work when it left the Senate.

SNOW: So the answer would be no?

CHENEY: I'd have to go back and--again, it's been a while since

I looked at the particular legislation.

000355
14
 SNOW: The president's going to deliver the State of the Union
address next week. There's a lot of talk about economic
stimulus.

In December, you used the term '"obstructionist'' when asked

about Tom Daschle. Do you still believe he is?

CHENEY: My friend Tom Daschle?

(LAUGHTER)

I thought--! was asked specifically as it related to the

economic stimulus bill. And I do believe, as I said then, I
haven't changed my view, that Tom was an obstructionist; that
we'd gotten a good bill through the House, that we've had a
serious blow to the economy, the recession that was already
under way, and then September 11 prolonged it, deepened it, and
that recovery from that depended upon our getting a decent
stimulus bill through.

Now, what's happened, of course, is, he blocked any action last

fall. As the Democratic leader in the Senate, he wouldn't let
anything come to the floor. He's now trying, I think, to recover
from that. I think he's feeling the heat.
/
But we think we still need a stimulus package, and we're hoping
he'll be cooperative.

SNOW: Do you like the offer he made yesterday?

CHENEY: I didn't see his offer yesterday,.

SNOW: OK. A couple of very quick parting questions. Your health?

CHENEY: Good.

SNOW: Good? That's it?

CHENEY: Well, I'm alive and kicking.

SNOW: No fibrillations? You haven't had any episodes?

CHENEY: No. My ICD is never activated. I wear my pacemaker, but

it's never gone off, so I'm still waiting to find out what it's
like when it does.

'\: So who's got the better cave, you or bin Laden?

^ 000356
15
CHENEY: I think I do.

SNOW: Comfortable?

CHENEY: Nobody's trying to bomb mine.

HUME: Just one quick question on the implications for U.S.

policy with Iran, given their—what you believe is their evident
role in arms to the Palestinians. Do we now--does that put Iran
on the list of countries we've got to deal with in the war on
terror?

CHENEY: Well, they've been there right along. The fact of the
matter is, Iran has been one of the foremost sponsors of state
terrorism in recent years for a very long time. And so clearly,
when we attempt to deal with the worldwide terrorism problem,
we've got to find some way to encourage Iran to change their
behavior.

SNOW: Mr. Vice President, thanks for joining us.

CHENEY: Thank you, gentlemen.

000357

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